SYDNEY -- Australia is planning to build one of the world's largest desalination plants as part of a $4.9 billion ($4 billion) programme to provide drinking water to the nation's second-largest city Melbourne.

The plan, announced Tuesday, followed a warning from environmental group WWF that removing salt from sea water to overcome a worldwide shortage of drinking water could end up worsening the crisis.

The Victorian state government said water bills for consumers could double to fund the A$3.1 billion plant planned for Wonthaggi, south-east of Melbourne. It also plans another A$1 billion expanding pipelines and the city's water grid.

The plan was part of a drought-proofing package to generate 150 billion litres of drinking water annually -- about one-third of Melbourne's current consumption, Australian Associated Press (AAP) reported.

Much of southern Australia has been in the grip of the worst drought in living memory and many reservoirs feeding major cities and towns are at alarmingly low levels. Water restrictions are widespread.

The desalination plant will be Australia's largest and is expected to be complete by 2011.

The Swiss-based WWF on Tuesday criticised desalination, the filtering and evaporation of sea water, as energy-intensive and involving significant emissions of greenhouse gases that are blamed for causing climate change.

Australia, Spain, Saudi Arabia and other arid countries should rely more on water conservation and recycling and avoid huge desalination projects that have been linked to pollution and ecosystem damage, it said.

Concerns about global warming are expected to spur investments in the technology. But many scientists say global warming will exacerbate droughts and melt the world's icecaps and glaciers, a major source of global freshwater supplies.

Glaciers around the globe are already melting rapidly, particularly in parts of Europe and the Himalayas.

The WWF estimated there were more than 10,000 desalination plants around the world.